“These are traits that it doesn’t take a genius to think of. Most are known requirements established through a decade and a half of hosting industry experience. If you want to differentiate, you need to get beyond them.” [emphasis added]

She lists traits common to most cloud providers: premium equipment, VMWare-based, private VLANs, private connectivity, and co-located dedicated gear but doesn’t really get into what really is – or should be – the focus of cloud offerings: services. To be more specific, infrastructure services.

A cloud provider of course wants a solid, reliable infrastructure. That’s why they tend to use the same set of “premium” equipment. But as Lydia points out differentiation requires services above and beyond simple hosting of applications in somebody else’s backyard.

Cloud providers need to differentiate based on what kinds of infrastructure services they can provide including but certainly not limited to management. Going above and beyond the basics, however, requires investment and some roll-up-your-sleeves coding at this point because the management and process automation systems simply don’t exist. The means to build those systems do exist – that’s part of the allure and value of dynamic infrastructure, a.k.a. Infrastructure 2.0.

Using the tools available it is wholly possible to build out the “self-service” for infrastructure services that folks have been led to believe will one day, hopefully, maybe be part and parcel of a cloud computing offering. Building this out is not trivial, but it’s certainly worth it if you’re trying to (a) differentiate from your competitors and (b) find yet another revenue stream on which you can ride smoothly into the next round of technology advances.

Lydia mentions that most cloud providers are built atop premium equipment and cites Cisco networks and F5application delivery infrastructure among others. There are more than enough “services” that can be abstracted via both companies’ APIs to keep cloud computing providers differentiating their hearts out. There’s presence and location, application acceleration, application security, commonly used web application functions like rewriting URIs and customized “apology” pages via network-side scripting just to name a few. There’s a veritable cornucopia of specialized functionality above and beyond simple network and application network functionality that simply isn’t being exploited to its full potential, both in terms of the technological capabilities and the ability to differentiate for a cloud computing provider.

There’s no reason why such differentiation of cloud providers cannot be achieved through infrastructure services and, in fact, its about the only way to differentiate aside from better management/control over design and maintenance of the deployment. The rest is simply price wars – competing based on cost per mega or kilo or peda or tera byte of something. The problem may very well be that we’re just too early in the game for such large-scale differentiation; that not enough customers are even sure what to do with the basics let alone advanced infrastructure service offerings. Problem is that many times customers won’t sign on to anything – a service or a product – without the promise that they can do more, either right now or in the future. Whether they want to – or will use those services – is irrelevant. The fact that they exist tells the customer that the provider is serious, dedicated, and ready to do business.

It’s kind of a Catch-22. Without the demand there’s no reason for a provider to invest in such an undertaking, but without investing in such an undertaking there may well continue to be a lack of demand. Remember that in many organizations data center infrastructure is the underlying foundation for their competitive advantage. If you can’t offer tit-for-tat you’re simply not a good replacement no matter how much “cheaper” you may be in the short term or long run.

Differentiation of cloud services will eventually come down to management and infrastructure services because there’s really no where else for it to go. What and how those services are packaged and offered to customers will go a long way toward cloud providers differentiating amongst their offerings.